Heineken NV confirmed on Tuesday that it was in talks with South Africa's Distell about a possible acquisition, in what would mark a push into wine and spirits for the world's second-largest brewer.
Distell, whose market capitalisation was 31.8 billion rand ($2.27 billion) at the close on Monday, said in a statement it had been approached by Heineken regarding a potential acquisition of the majority of its business.
Distell is also the world's second-largest cider maker, a business in which Heineken is heavily involved, chiefly through its Strongbow brand.
Distell also makes wines and spirits, including Amarula and Two Oceans wines. Heineken already sells beer in South Africa.
A Potential Transaction
Both companies said that discussions were ongoing and there was no certainty an agreement would be reached.
An acquisition would be the first for Heineken chief executive Dolf van den Brink, who took charge at the Dutch brewer last June and has launched a plan to restore profit margins, partly through cutting 8,000 jobs.
Distell shares jumped by as much as 10.4% in early trading on Tuesday to a four-year high of 158.00 rand. At 07:45 GMT, they were up 4.5% at 149.54 rand.
In January of this year, the South African wine, cider and spirits company said it would expand into cannabidiol-infused drinks following the acquisition of a 20% stake in cannabis wellness business Rethink.
Rethink's product range includes oils, capsules and teas made from cannabidiol (CBD), a chemical compound found in the cannabis plant that is gaining popularity for uses ranging from relaxation to skin care.